United States v. Lap Ene/Opinion of the Court
All commercial contracts with the subjects or in the territory of the enemy, whether made directly by one in person, or indirectly through an agent, who is neutral, are illegal and void. This principle is now too well settled to justify discussion.  No property passes and no rights are acquired under such contracts.
In March, 1862, the whole of the State of Louisiana was in the limitary possession of the Confederate forces. Intercourse between the inhabitants of the different portions thereof was legal, and contracts made between them were legal.
On the 27th of April, in the same year, the city of New Orleans was captured by the military forces of the United States, and thereafter remained under their control. From that time commercial intercourse between the inhabitants of that city and the inhabitants of other portions of the State of Louisiana which remained under the Confederate rule became illegal. Ordinarily the line of non-intercourse is the boundary line between the territories of contending nations. The recent war in the United States was a civil war, in which portions of the same nation were engaged in hostile strife with each other. The State of Louisiana, although one of the United States, was under the control of the Confederate government and their armies, and was an enemy's country. While the city of New Orleans was under such control it was a portion of an enemy's country. When that city was captured by the forces of the United States, the line of non-intercourse was changed, and traffic before legal became illegal. This line was that of military occupation or control by the forces of the different governments, and not that of State lines. This principle was expressly decided in Montgomery v. United States.  There the cotton sold was in the parish of La Fourche, a parish of the State of Louisiana, and belonged to Johnson, an enemy domiciled in an enemy's country, to wit, the parish of La Fourche, in the same State. The sale was made by an agent of Johnson, in the city of New Orleans, to Montgomery, a British subject. This court held the sale to be void and that no title passed to Johnson.
Like that in Montgomery's case, the agency here was created while it was legal to create an agency. In each case, also, existed the important fact that the transaction of purchase took place after the parties became residents of hostile portions of the same State. Burridge was appointed the agent of Johnson in Montgomery's case, as was the agreement in this case made with Avegno, and the money advanced by him, while the parties were all residents of and under the control of the Confederate government. But the cotton was sold by Burridge, as here the cotton was purchased by the clerk after this relation had ceased. In each instance the purchase of the cotton was a transaction with an alien enemy.
The agency to purchase cotton was terminated by the hostile position of the parties. The agency to receive payment of debts due to Lap ene & Co. may well have continued. But Avegno was no debtor to that firm. He advanced money to their agent when it was legal to do so. With this money, and other moneys belonging to them, while in an enemy's country, the agent of the plaintiffs bought the cotton in question. This purchase gave effectual aid to the enemy by furnishing to them the sinews of war. It was forbidden by the soundest principles of public law. The purchaser obtained no title to the cotton, and has no claim against the government for its capture.
Dissenting, Mr. Justice MILLER and Mr. Justice FIELD.
^5 Woolsey's International Law, § 117; Montgomery v. United States, 15 Wallace, 395.